One of the Limiting Factors for Using Monetary Policy Is

question 71

Multiple Choice

One of the limiting factors for using monetary policy is:

• A) the central banks are limited in their ability to print money.
• B) central banks are limited in their ability to make loans.
• C) there is a lower nominal-interest-rate bound of zero.
• D) the real interest rate cannot fall below zero.

---

Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied at those prices.

Purely Competitive

A commercial framework with a vast number of tiny enterprises, a single type of product, freedom to enter and leave, and total transparency of information.

Allocative Efficiency

An allocation scenario where it's not feasible to enhance one person's well-being without negatively impacting another's.

Scarce Resources

Limited natural, human, and capital resources that cannot satisfy all wants and needs.